Eligibility for a USDA Commercial Loan
Proper financing for small businesses, and really all businesses, is essential for staying in the game and keeping clients and employees happy, including yourself. For certain kinds of businesses, the USDA offers a variety of business programs which provide financing that could be right for you.
The USDA Business Programs provide financial backing and technical assistance to stimulate rural business creation and growth (mainly areas under 50,000 population), as well as promote clean environments. The programs work through partnerships with public and private community-based organizations and financial institutions to provide financial assistance, business development, and technical assistance to rural businesses. These programs help to provide capital, equipment, space, job training, and entrepreneurial skills that can help to start and/or grow a business. Business Programs also support the creation and preservation of quality jobs in rural areas.
Loans, loan guarantees, and grants are available to individuals, businesses, cooperatives, farmers and ranchers, public bodies, non-profit corporations, Native American Tribes, and private companies in rural communities. The financial resources of the Business Programs are often leveraged with those of other public and private credit source lenders to meet business and credit needs in under-served areas.
The funding is intended to help improve the quality of life in rural communities by enhancing economic opportunities and ensuring self-sustainability for generations to come. USDA Loan proceeds may be used for a variety of business purposes including:
- Working capital
- Machinery and equipment
- Real estate
- Certain types of debt refinancing.
This is done by expanding the lending capability of private lenders in rural areas and helping service quality loans that provide lasting community benefits.
The following are examples of some of the programs available:
- Advanced Biofuel Payment Program: supports and ensures expanding production of advanced biofuels by paying producers for finished products
- Business and Industry Loan Guarantees: guarantees loans for rural businesses
- Distance Learning and Telemedicine Grants: uses telecommunications to connect, for example, medical service providers and teachers in one area to students and patients in another.
- Rural Microentrepreneur Assistance Program: provides microloans to help small businesses startup and grow. Provides training and technical assistance to microloan borrowers and micro-entrepreneurs.
Be aware that many of these loans will require a personal guarantee, and USDA guarantees are only available in rural areas – with a population of 50,000 or less.